India’s 8 core industries grow 0.7% in May; cement, steel lead gains

The combined Index of Eight Core Industries recorded a marginal year-on-year increase of 0.7% in May 2025, compared to May 2024, according to provisional data released by the Ministry of Commerce and Industry.

The growth was primarily driven by higher production in Cement, Steel, Coal, and Petroleum Refinery Products.

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The ICI, which comprises 40.27% of the overall Index of Industrial Production (IIP), measures the performance of eight key infrastructure sectors: Coal, Crude Oil, Natural Gas, Refinery Products, Fertilizers, Steel, Cement, and Electricity.

In terms of sector-wise performance, Cement production rose sharply by 9.2%, the highest among all sectors, followed by Steel, which registered a 6.7% increase.

Coal output grew 2.8%, while Petroleum Refinery Products recorded a 1.1% uptick.

However, the overall index was weighed down by contractions in several other sectors. Electricity generation declined 5.8%, a significant drag on the index. Fertilizer production dropped 5.9%, and Natural Gas output fell 3.6%. Crude Oil production continued its downward trend with a 1.8% dip.

In terms of cumulative performance (April–May 2025–26), for the first two months of FY26, the cumulative index presents a mixed picture.

Cement and Steel continued to show robust growth at 7.8% and 5.5%, respectively. Coal posted a 3.1% rise, while Refinery Products slipped by 1.7%.

The cumulative output of Electricity, Fertilizers, Crude Oil, and Natural Gas all showed declines, signaling subdued industrial energy demand and production constraints.

While the marginal growth in May reflects resilience in select infrastructure sectors, the continuing decline in energy and fertilizer output raises concerns over broader industrial momentum. Policymakers are expected to monitor trends closely as they assess the implications for GDP growth and IIP performance in the coming quarters.